The following table indicates the unit prices (in Rands) and quantities of three goods held in the national warehouse of a DIY (“do it yourself”) store for the years 2020 and 2021. Item 2020 2021 Unit Price (p0) Quantity (q0)) Unit Price (p1) Quantity (q1) Mineral spirits R23.70 30 R27.70 45 10mm spanner R49.00 60 R65.00 50 25mm brush R58.00 30 R63.00 40 Q.8.1 Using 2020 as the base year, compute the price relatives in 2021 for the 10mm spanner and the 25mm brush. Interpret your answers. (8) Q.8.2 Again, using 2020 as the base year, compute the Paasche price index for all of the items for 2021. Interpret your answer.
The following table indicates the unit prices (in Rands) and quantities of three goods held in the national warehouse of a DIY (“do it yourself”) store for the years 2020 and 2021. Item 2020 2021 Unit Price (p0) Quantity (q0)) Unit Price (p1) Quantity (q1) Mineral spirits R23.70 30 R27.70 45 10mm spanner R49.00 60 R65.00 50 25mm brush R58.00 30 R63.00 40 Q.8.1 Using 2020 as the base year, compute the price relatives in 2021 for the 10mm spanner and the 25mm brush. Interpret your answers. (8) Q.8.2 Again, using 2020 as the base year, compute the Paasche price index for all of the items for 2021. Interpret your answer.
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 20AA
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Question
The following table indicates the unit prices (in Rands) and quantities of three goods held in the
national warehouse of a DIY (“do it yourself”) store for the years 2020 and 2021.
Item
2020 2021
Unit
Mineral spirits R23.70 30 R27.70 45
10mm spanner R49.00 60 R65.00 50
25mm brush R58.00 30 R63.00 40
Q.8.1 Using 2020 as the base year, compute the price relatives in 2021 for the 10mm
spanner and the 25mm brush. Interpret your answers.
(8)
Q.8.2 Again, using 2020 as the base year, compute the Paasche price index for all of the
items for 2021. Interpret your answer.
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